Indian equity markets witnessed a sharp decline today, weighed down by weak global cues, persistent foreign fund outflows, and broad-based sectoral selling. The sentiment turned cautious as investors resorted to profit-booking after the recent rally, with valuations appearing stretched across multiple segments.
Global markets set the tone for the decline, as US equities slipped overnight, triggering weakness across Asian indices and dragging Indian benchmarks lower. Adding to the pressure, Foreign Institutional Investors (FIIs) continued to withdraw funds, reducing market liquidity and dampening overall sentiment.
IT stocks led the fall, with heavyweights such as TCS, Infosys, and Tech Mahindra witnessing notable declines. Concerns over slowing global demand, visa and regulatory challenges affecting exports, and profit-booking after recent gains weighed on the sector. Given IT’s significant weight in benchmark indices, its fall had a cascading effect on the broader market.
Financials and banking stocks were also under pressure, with leading banks and NBFCs facing selling interest. Uncertainty surrounding credit growth, regulatory developments, and rising cost pressures added to investor caution. The weakness in this space amplified the market’s overall decline, given its large representation in the indices.
Consumer goods, FMCG, and pharma stocks—typically considered defensive—also lost ground. Several FMCG majors have reported muted profit growth due to softening consumer demand, input cost inflation, and margin pressures. This unexpected weakness in defensive segments further dented confidence.
Beyond these, broad-based selling across mid-cap and small-cap counters added to the market’s woes. Sectors like auto, realty, and consumer durables also faced profit-booking. On the technical side, key indices breached crucial support and moving average levels, triggering algorithmic and quant-driven selling, deepening the downturn.
Overall, the combination of global market weakness, sustained FII outflows, stretched valuations, and sectoral headwinds has led to a risk-off mood, prompting investors to stay cautious in the near term.
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